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What is a sworn statement?
What is a sworn statement?
A sworn statement is a legal document used in construction projects that lists all contractors, subcontractors, and suppliers providing labor or materials for a project. When signed, it serves as a sworn declaration that the information provided is complete and accurate, meaning the signer is swearing under oath that no parties other than those listed need to be paid for work on the project.
Sworn statements include detailed financial information for each party, such as contract amounts, previous payments, current amounts due, and remaining balances. Because these statements are made under oath, providing false information can result in perjury charges.
For subcontractors, sworn statements create transparency in the payment process, ideally to help prevent payment disputes. They’re typically submitted alongside payment applications, especially when requesting final payment. While not required in most states, Michigan and Illinois mandate sworn statements for all construction projects, with Michigan requiring a specific standardized form. Submitting sworn statements proactively—even when not explicitly required—can build trust with general contractors (GCs) and often results in faster payments. However, accuracy is critical; any discrepancies with sworn statements can have the opposite effect—delayed payments and damaged relationships. Check out this blog post for more tips on managing sworn statements.
Siteline can simplify the sworn statement process through integrations with popular construction accounting systems like Sage 300 CRE, Sage 100, Sage Intacct, Spectrum, and Vista. These integrations automatically pull accounts payable (A/P) information to complete sworn statements and subcontractor affidavits accurately, preventing costly errors and delays. See for yourself—book a no-obligation demo of Siteline today.
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Other construction terms
What are Assets?
Assets, in the context of the construction industry, refer to any owned resources or properties that add value and can be converted into cash. There is a vast range of assets in construction, including land, buildings, machinery, vehicles, materials, and tools. Even intangible items like contracts, licenses, brand reputation, and technical know-how are also considered assets. Investments in staff training, software systems, patents, and copyrights also represent assets as they contribute to the operational efficiency and competitiveness of the construction company. Therefore, asset management is vital in construction for optimal utilization and maintenance of these assets.
What is a Time and Materials Contract?
A Time and Materials Contract, often abbreviated as T&M, is a specific type of contract commonly used in the construction industry. It is a contractual format that indicates that the client will pay based on actual costs: the direct labor hours worked (time), the materials directly used in the final product, and a fixed add-on to cover overhead and profits. Unlike fixed-cost contracts, T&M agreements provide greater flexibility as the scope of work can change without having to negotiate a new contract. This type of contract is generally applied in projects where the full extent of the work cannot be determined at the outset. However, their major downside is the potential risk of cost overruns, which makes client oversight crucial.
What is Long-term Debt?
Long-term debt, in the context of the construction industry, refers to financial obligations that a construction firm or contractor needs to pay back over a period extending beyond one year. This could include bank loans, bonds, lease obligations, or mortgages secured for construction projects that are due over an extended time period. The purpose of such debt typically covers buying equipment, land acquisition, building construction, or any major capital-intensive activity that is invested in the growth and expansion of the company's operation. It is key for cash flow management and financial planning, as repayment schedules are set over multiple years which reduces the immediate financial burden. However, this requires effective management to avoid risk of default. Therefore, managing long-term debt is a critical aspect of a construction firm's financial strategy. If not handled properly, high long-term debt can affect a company's credit rating and financial stability.
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